Notes for trust officers, private bankers and others concerned with estate and trust planning, from a Merrill Anderson Senior Editor and his retired mentor.

Friday, May 10, 2013

Stock Certificates: Going, Going …

If your broker jumped out the window during the Great Depression, you were sorry you left your shares in street name. Prudent investors obtained stock certificates and tucked them in their safe deposit boxes.

For decades seasoned investors continued the precaution. In the 1960's, Robert Morse's Bert Cooper, most venerable of the Mad Men, probably still held tight to his shares. The younger generation more likely left their stocks with their brokers.

Holding on to stock certificates had its inconveniences, as did holding bearer bonds with coupons that had to clipped in order to collect interest payments. That's why Chase Manhattan advertised custody accounts in those classic nest egg ads. Trust institutions held customer certificates in their own vaults or, in later years, in depositories.

In the 21st century securities certificates have become an anachronism. Soon they'll vanish altogether, at least for publicly-traded businesses. The coup de grace was superstorm Sandy. Flooding much of downtown Manhattan, Sandy left Depository Trust and Clearing with 1.7 million soaking wet certificates. One million seven hundred thousand!

How will we introduce kids to the world of investing if we can't give them a couple of shares of Apple?

At least old stock certificates, found at sites such as Scripophily, will help preserve the history of American business. This Edison certificate is signed by the great man himself.